While many benefits are at the discretion of the employer, there is a set of employee benefits that are mandated by law. These legally required benefits are designed to ensure the financial security, well-being, and rights of employees.   

Here are 5 employee benefits that are required by law:  

Social security and Medicare  

Social security and Medicare are federally mandated benefits, funded through payroll deductions from both the employer and the employee. Both of these benefits are put in place to ensure that employees are taken care of after retirement or if they experience certain disabilities or medical conditions later in their life.  

Workers’ compensation insurance 

Workers’ compensation insurance is a legally required benefit for employees. This insurance covers the cost of medical expenses and lost time for work associated with injuries or illnesses that occur on the job. 

Unemployment insurance  

If an employee involuntarily loses their job, then unemployment insurance provides partial income for a short period of time. Employees who quit their job are not typically eligible for unemployment benefits unless they have a qualifying reason to quit their job. For example, if employees were working in dangerous conditions or dealt with harassment or discrimination, then it is possible for employees to qualify for unemployment benefits, as they were not given another choice. Unemployment is funded through a state tax paid by employers on employee wages. 

Health insurance  

The Affordable Care Act (ACA) requires that companies who have 50 or more full-time employees provide healthcare coverage or pay a penalty to the IRS. While not required for all employers, health insurance can help keep your employees physically and mentally healthy, which can increase productivity and overall satisfaction.  

Family and medical leave  

Businesses that have 50 or more employees are required by the Family and Medical Leave Act (FMLA) to provide workers with up to 12 weeks of unpaid, job-protected leave. Employees are eligible for FMLA if they have been employed in the state for at least 12 months and worked at least 1,250 hours in the 12 months that precede the first day of the requested leave. Many states also have their own family and medical leave requirements. It is important to understand the state laws in every state your employees work in, including remote employees. 

While the benefits offered by many employers vary, there are some that are legally required to be offered by employers. It is important to understand these in order to keep your company in compliance.